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EU summit delayed as leaders brawl over budget

22 November 2012, 22:22 CET
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EU summit delayed as leaders brawl over budget

Silence - meeting in progress

(BRUSSELS) - The start of an EU summit to settle the bloc's disputed trillion-euro budget was delayed Thursday as leaders sought to reconcile differences amid warnings of a possible collapse of the talks.

Leaders of the European Union's "big two", France's Francois Hollande and Germany's Angela Merkel, appealed for compromise before sitting down to what is likely to be a long and bitter fight over the 2014-2020 budget.

"I have come to seek a compromise, not to set an ultimatum," said Hollande after British Prime Minister David Cameron turned up threatening to use his veto if the bloc failed to meet his demands for drastic cuts in its next seven-year budget.

Merkel warned a second summit could not be ruled out if nations continued to diverge and the official summit start, scheduled over two days but possibly to last through to the weekend, had to be delayed amid a flurry of backroom bargaining.

A new draft proposal to accommodate the 27 different points of view was to be circulated by EU president Herman Van Rompuy at around midnight (2300 GMT) after he met each of the heads of state and governments in a series of tete-a-tetes held inside EU headquarters.

"Each one of us will doubtless have to show a spirit of compromise," Merkel said, adding it was however "possible we will need a new stage" to clinch a deal.

Austria's Chancellor Werner Faymann raised the idea of a fresh summit in January and February, as did the premiers of Italy and Spain, Mario Monti and Mariano Rajoy.

"We will not accept the inacceptable," warned Monti.

Italy is among countries that contribute more to the EU budget than they get back, known as the "net contributors", while once mighty Spain recently joined the camp of those who get more cash than they put in the common pot.

Britain is the most vocal of the group of austerity-driven contributor nations seeking EU budget cuts to match belt-tightening programmes at home.

"No, I'm not happy at all," Cameron said on arrival.

"Clearly at a time when we are making difficult decisions at home over public spending, it would be quite wrong... for there to be proposals for this increased extra spending in the EU," he told reporters.

Cameron, who is under constant pressure from eurosceptics in his Tory party to battle supposed European meddling and bureaucracy, had vowed to bring down the budget from a proposed 1.047 trillion euros to 886 billion euros.

An EU diplomat who asked not to be identified said he was prepared to accept a 940-billion-euro spending ceiling.

Austria, Britain, Denmark, France, Finland, Germany, Netherlands and Sweden have banded together to demand spending cuts, but are far from being on the same page regarding what should be cut or by how much.

France, meanwhile, the biggest recipient of farming funds, has rejected proposals to cut spending on the Common Agricultural Policy (CAP), the largest item on the budget.

But so-called Cohesion Funds -- billions of euros outlayed each year to the EU's newer and poorer entrants in the south and east of the continent so they can catch up with richer neighbours -- are also central to the battle at the summit.

The funds, second-biggest budget item, will be defended tooth and nail by the 15 "Friends of Cohesion" nations -- led by Poland and Portugal -- who are net beneficiaries of the EU budget.

"Cohesion is an issue of competitiveness and growth for the whole European Union, not just for the countries with the greatest needs," argued Prime Minister Antonis Samaras of debt-stricken Greece.

The third hot-button issue will be rebates.

Britain in particular cherishes the budget rebate obtained by then prime minister Margaret Thatcher in 1984 on the grounds that London was paying too much into the bloc's coffers.

It was worth 3.6 billion euros last year, and Cameron vowed Thursday that he had no plans to give it up. Germany, the Netherlands, Sweden and Austria are insisting on keeping their rebates if Britain's is left untouched.

Facts and figures on EU budget

Special meeting of the European Council

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